4 benefits of independent loan agents 

June 02, 2022

In periods of market downturn, loans may default – presenting many challenges to lenders. An experienced loan agent can provide guidance, resources and expertise to help you maintain momentum during difficult times.

 

While there are some loan-servicing functions a lender might be able to handle in-house, working with an independent, financially stable partner presents strong advantages. Here are the four top benefits.

 

1. Strength, stability and resources

A third-party loan agent with a long-standing, stable financial history provides security and reassurance – especially during times of financial uncertainty. Many loans require evidence of proper policies and procedures, including anti-money laundering (AML) procedures. A large financial institution can provide a SOC 1 controls verification report to attest to this. Proper AML processes are especially important when it comes to the intricacies of loan servicing and the frequency of money movement.

Lenders can also benefit from the vast resources of a reputable provider, including the efficiencies provided by a dedicated team, a global footprint, multicurrency capabilities and a proven business continuity plan.

 

2. Conflict avoidance

Unlike lenders, an independent loan agent isn’t driven by financial considerations. Without a financial interest, loan agents can rely on majority requirements and act as a conduit between the borrower and lender to ensure all rules and regulations are observed.

 

3. Continuance

A loan agent can help with all steps of your transaction from start to finish. That means lenders don’t need to seek out a successor agent when certain financial implications arise.

If a loan entered default, many lenders would need to enlist outside help to coordinate the logistics. With a third-party relationship already in place, the loan agent can assist with trade settlements for those who need to exit and help lenders obtain the information they need. Terms on credit agreements might change and lenders might vary, but the loan agent remains in place as a consistent and reliable partner to help administer the plan.

 

4. Expertise and comprehensive services

Independent loan agents bring a wealth of knowledge to the table from their experience with a broad spectrum of companies across a wide variety of transactions, including debtor-in-possession (DIP) financing. From back-office work to administration support, partnering with a loan agent smooths the process for both the lender and borrower. Complete services include:

  • Calculate interest and fees 
  • Maintain the loan register and lender positions, and facilitate trades
  • Repository of information, notices, financials, budgets and reorganization plans
  • Maintain and protect collateral for lenders
  • Collaborate with all parties and adhere to bankruptcy court orders
  • File proof of claims, and record and process the necessary ballots and votes
  • Gather and organize the lenders through votes of amendments and reorganization of credit through the court to a new plan or exit financing
     

By using a committed loan agent, lenders have more time to focus on lending responsibilities. With the right partner, they can be confident the details of their loan will be administered properly – no matter how circumstances might change or markets might evolve in the future.

 

With a sound financial history and extensive experience servicing loans, U.S. Bank is a trusted and reliable loan agent. Learn more about how we can help you through our comprehensive loan agency services.

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Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.